Archive for January, 2015

Man running away with suitcase of money image on www.BudgetProfessional.comThe IRS deals with so many different tax scams every year, they make a list of the worst offenders and call it “The Dirty Dozen”.

First Scam Alert of the Year is Phishing

Today the IRS issued the first of what will be many scam warnings this year.

Taxpayers need to watch out for fake emails or websites trying to steal your personal information. These “phishing” schemes continue to be bad enough they’ve made the scam list for the 2015 filing season.

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime, but many of these schemes peak during filing season as people prepare their returns or find people to help with their taxes.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution for the criminals behind them, but not before you may lose significant assets, or worse.

“The IRS won’t send you an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS that takes you by surprise,” said IRS Commissioner John Koskinen. “I urge taxpayers to be wary of clicking on strange emails and websites. They may be scams to steal your personal information.”

What is Phishing?

Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site. The site is designed to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.

Recent scams have used the Electronic Federal Tax Payment System (EFTPS) to attract potential victims.

The IRS Will Not Email You

It is important to know the IRS does not initiate contact with taxpayers by email, text message, or social media to request personal or financial information.

The IRS will not ask for PIN numbers, passwords, or similar access information for credit cards, bank accounts, savings accounts, etc.

If you receive an unsolicited email claiming to be from the IRS that contains a request for personal information, taxes associated with a large investment, inheritance, or lottery:

  1. Don’t reply.
  2. Don’t open any attachments. They can contain malicious code that may infect your computer or mobile phone.
  3. Don’t click on any links.
  4. Forward the email as-is to the IRS at  Don’t forward scanned images because this removes valuable information.
  5. Delete the original email.

Report Bogus Websites Here

If you discover a website on the Internet that claims to be the IRS but you suspect it is bogus:

  1. Send the URL of the suspicious site to  (Subject: ‘Suspicious Website’)

Report Bogus Text Message Here

If you receive a text message claiming to be from the IRS or an organization closely linked to the IRS:

  1. Don’t reply.
  2. Don’t open any attachments. They can contain mal-ware that may infect your computer or mobile phone.
  3. Don’t click on any links.
  4. Forward the text as-is, to the IRS at 202-552-1226. Note: Standard text messaging rates apply.
  5. If possible, in a separate text, forward the originating number to the IRS at 202-552-1226
  6. Delete the original text

Report You’ve Been Scammed

If you’ve been scammed or lost any money due to an IRS-related incident, report it to the Treasury Inspector General Administration (TIGTA) and file a complaint with the Federal Trade Commission (FTC)


Have you ever been the victim of an IRS or other financial scam?

Have you ever  received a phone call where the caller tried to get personal financial info from you, such as a Social Security or bank account number? 

Do you have a tax question? Send me an email and ask!
I’ll try to include your question and my answer in an upcoming Q&A Newsletter article

What Is Your Question?

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Do you have a tax question? Send me an email and ask!
I’ll try to include your question and my answer in an upcoming Q&A article

What Is Your Question?

I Have a Small Business. What Can I Deduct on my taxes?

Q: I have a small, weekend photography business. Engagement and prom pictures are my specialty, and I’m spending a lot of money. What expenses can I deduct on my taxes?

A: A business expense must be both “ordinary and necessary” in order to be deductible. The IRS defines an “ordinary expense” as one that is common and accepted in your trade or business. A “necessary expense” is one that is helpful and appropriate for your trade or business.

You’re a photographer. Film, photo paper, darkroom chemicals, and memory cards are examples of ordinary expenses.

If you use anything in your business that you also use personally, (cell phone, car) keep good records and track what percentage of that expense is actual business use.

Is Loan Interest Tax Deductible?

Q: I took out a small loan last year and bought equipment for my lawn care business. Is the interest I pay on that loan tax deductible?

A: Yes, it is. The equipment you bought became an asset to the business, and the loan became a liability to be repaid. Usually, interest paid on a loan like this is a deduction.

Soup is a Charitable Contribution?

Q: I do a lot of charity work. Someone told me I could take a deduction for the ingredients I buy and use when I volunteer in the soup kitchen. I also recently bought a roll of 100 stamps and used those to mail fund-raising literature for my kid’s school. Is any of that really deductible?

A: Yes, it is, but keep your receipts. Ingredients bought for soup your prepare for a non-profit organization is a charitable contribution, as is the roll of stamps you bought and used for fund-raising. It’s very important that you keep the receipts to back up your claims.

Also, the law says that if a donation is more than $250, you need documentation from the charity receiving the donation. If your grocery receipts for soup, for example, total more than $250 for the year, the charitable organization will have to give you a written receipt showing dates and dollar amounts given.

You can also deduct a mileage expense if you drive your car for charity. The 2014 mileage rate is 14 cents a mile.

Keep written mileage records to back up your deduction. In an audit, mileage is one of the first things they try to take away, and they get that done because people don’t keep good mileage records.

Can I Deduct Living Expenses Working Away From Home?

Q: I’m a computer programmer, and last year I worked a temporary, 8 month job assignment in another state. I came home a couple of weekends a month. Can I deduct the living expenses for my temporary job?

A: It’s all about time. If you take a temporary job, away from what is considered your normal tax home, you may be able to deduct those living expenses IF the job lasts LESS than 12 months. If the job lasts for more than 12 months – surprise! – you have a new tax home. The IRS considers the temporary area to be your new tax home once you’re there more than a year.


You can file an amended tax return up to 3 years after the original filing in order to capture missing deductions or credits. Use Form 1040X to file an amended tax return.

Do you have a tax question? Send me an email and ask!
I’ll try to include your question and my answer in an upcoming Q&A article

What Is Your Question?

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Who Is Your Tax Preparer?

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They Know EverythinThe_Budget_Professional_IRS_Tax_Word_Cloudg About You

Have you ever stopped to think about the fact your tax return preparer is trusted with your most personal information?

They know about your marriage, your divorce, your income, the social security numbers of everyone in the family, dates of birth, your checking account info – all the details of your financial life.

Most tax return preparers provide great service. However, each year some taxpayers are hurt financially because they choose the wrong tax return preparer.

There Are Different Areas of Expertise in the Tax Field

Anyone can be a paid tax return preparer as long as they have an IRS Preparer Tax Identification Number (PTIN) and they sign and enter it on all returns they prepare.  However, tax return preparers have differing levels of skills, education, and expertise.

A tax preparer can prepare your tax return and speak to the IRS on your behalf as long as you give your permission.

This type of preparer is what most people use – but stop and give some thought to your preparer. Are you handing off your classified personal info to a stranger in a chain store that won’t know you if you call with a question tomorrow, and who you probably won’t see again next year?

Or, is your preparer someone local, with a good reputation, whose been in business for many years?

Check Those References!

Choose wisely when selecting a paid tax return preparer. Remember, your preparer is going to know everything about your personal information .

Who would you rather turn your paperwork over to: a tax professional licensed by the IRS, or a seasonal chain store worker, hired after completing a two week night class in Basic Tax 101?

Choose wisely. Your financial health depends on it.

Who does your taxes? One of the big tax chains, someone local, or do you use software, such as Turbo Tax, and do everything yourself?

Do you think you’ll get a refund this year? 
Are you using your refund to catch up on bills or go on vacation?

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Categories : Form 1040, IRS, Tax Refund, Taxes
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Unlike this same time last year, when a group of idiot politicians shut the government down, ultimately costing the American taxpayer $24 billion dollars, and delaying tax filing season for weeks – the government will remain open.

Tax Season Opens As Planned

Since tax season will open as planned, that means you can file your personal income tax return as early as January 20th! Both paper and electronic returns will begin being accepted on that date. (It’s a Tuesday!)

Keep in mind, mailing in a paper tax return before January 20th isn’t going to do you any good. Your return will not be processed faster. It will go in a box and won’t be looked at until Tuesday, January 20, 2015.

According to the IRS, the most accurate way to file a tax return and the fastest way to receive a refund is to file electronically.TheBudgetProfessional.com_Picture_of_Uncle_Sam

I’ve seen a couple of the Big tax preparation outfits saturating television with ads, drawing people in right now. I don’t recommend the Big Guys when it comes to tax prep – hire a local company to do your taxes. Ask around, get references, and check the preparer out before you trust them with all of your most important financial secrets and information.


Choose your preparer wisely. Your financial health depends on it.


Do you usually get a refund or do you end up paying in?

Do you already have your refund spent?
Are you using your refund to catch up on bills or go on vacation?

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